Archive for the ‘KDP (Kindle Direct Publishing)’ Category

For as long as anyone in the publishing business can remember, it’s been about selling books.

It hasn’t actually mattered if anyone read the book or not…just whether they bought it.

Oh, sure, if someone read it (and enjoyed it), you were more likely to get good word of mouth out of it, which could result in more sales, but when you are looking at the initial calculations, it’s just the purchase that matters.

Amazon is changing all that…at least for independent publishers in their

They took a step in the new direction with KU originally, when someone had to read ten percent of a book which was borrowed before the publisher (which might be just the author) got paid for the borrow.

That was more of a threshold thing, though. You have to prevent someone from borrowing a bunch of books and not reading them, just to get the author (who might be a friend) a royalty.

In the new system (starting July 1st), you get paid based on the number of pages read.

That completely up ends the game!

A book has to be good…all the way through…for you to get the maximum payment.

The current KU system has benefited short “books”. I wrote about that before: how, for example, a winning strategy would be to break a book on ten great TV series into ten separate books.

This changes that.

Obviously, if they counted screens of text displayed, this would be easy to game. You could just put one letter per screen. 🙂

Amazon has come up with a way to do the calculations. This is their explanation in a short excerpt from the referenced page above:

“To determine a book’s page count in a way that works across genres and devices, we’ve developed the Kindle Edition Normalized Page Count (KENPC). We calculate KENPC based on standard settings (e.g. font, line height, line spacing, etc.), and we’ll use KENPC to measure the number of pages customers read in your book, starting with the Start Reading Location (SRL) to the end of your book. Amazon typically sets SRL at chapter 1 so readers can start reading the core content of your book as soon as they open it.

This standardized approach allows us to identify pages in a way that works across genres and devices. Non-text elements within books including images, charts and graphs will count toward a book’s KENPC.”

I’m sure they’ll also take into account reading speed in some way so you can’t just flip through the screens.

I suspect they’ll also be able to tell if you bounce around. If you are reading an anthology and skip a story, I assume that story won’t count. In other words, you can’t just jump 100 pages into it and give the publisher credit for 100 pages read.

While this currently only affects borrows, I think readers would like it if it was also the case with purchases.

Wouldn’t you just love this? No padding in an anthology. No clunker pieces in a non-fiction collection.

Of course, I’m portraying it in its best possible light…I tend to do that. 😉 I’m assuming Amazon will count actual pages read (by judging how long you stay on a page…our devices can already calculate our reading speed). If they don’t, we could get a lot of filler.

Another negative might be that it could be harder for new authors to get exposure. One way that happens now is that you stick an untested author’s story into an anthology with other better-known works…sometimes with public domain works.

However, there is one more very interesting thing about this to me.

You can’t do it with p-books (paperbooks).

That could really create a bifurcated system…what makes you money in an e-book might not be what makes you money in a p-book…and vice versa.

A great (and perhaps misleading) cover could work in a p-book…but if only gets people to read the first ten pages, it could fail as an e-book paid by the page.

This could lead to a much greater degree to books published in only one of the two formats. If you are only going with one, I think you are going with e-books (much lower risk). I’m not going to say that’s part of the secret agenda here, but it’s fun to speculate….

One last thing: in a way, this is a throwback to the pulp era when authors were paid by the word. Not the same, of course. In this case, it’s not that you benefit purely from tremendous output in a variety of genres (which was the case for many writers back then), but only if people actually read it.

Fascinating, and I need to think about this a lot more…

What do you think? If you are a reader, what do you think about this? If you are an author? Publisher? What flaws are you seeing in the idea? I didn’t address this, but does it mean the money will come in more slowly? For example, I read some books over the course of years…a chapter here, a chapter there. I might love a book like that, but use it as a “palate cleanser” between novels. As I think about that, is that bad for an author/publisher? It would be like getting residuals from having done a sitcom on TV…lump sums (like big advances) can help finance the next book, but this could help you have a smaller amount of money all the time…could help you live. Oh, and what does this do to advances, if it spreads over to purchases? Would they not give you a big advance if they didn’t know people would read the whole book? That could affect certain brand name authors, who shall remain nameless. 😉 I definitely want to hear from my readers on this…feel free to share your thoughts with me and my other readers by commenting on this post.

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. Shop ’til you help!

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

rather than the non-Fire Kindles…when you are talking illustrations (and animations) there is no comparison.

However, this publishing will also let people put age and grade levels on their books, which will help even if it is more text-based.

I’m a bit curious about that: can anybody just pick whatever they want?

Age and grade levels can be very tricky.

When our now adult kid was, oh, six or so, they were reading at a much higher level. The school librarian gave our kid a Goosebumps book…nightmare city! The reading level was more appropriate, but the material wasn’t. That’s what I mean by it being tricky.

There are 163,828 children’s books in the USA Kindle store right now…I suspect we may see that grow pretty rapidly.

I have no question that this is a plus for the authors. I think it will also be a plus for the readers…and since this is part of KDP, it ought to bump up the options for kids using

There is a Kindle app for the former and not for the latter…but you could mirror a Kindle Fire to a Fire TV, and they may work out an app for books.

Would you read a book on a TV?

I could certainly see reading Chicka Chicka Boom Boom or a Dr. Seuss book to a room full of kids!

I don’t think the people at Amazon are anti-p-book (paperbook), but it’s better for their business model to promote e-books. P-book distribution is still largely under the control of tradpubs (traditional publishers) and brick and mortar stores, although e-tailing is probably moving up (and will move up more in a hurry if Barnes & Noble or Books-A-Million collapse).

If your kid is reading color, slightly animated e-books on a Kindle Fire through Kindle Unlimited, it really commits you much more deeply to Amazon.

Then, maybe you become a Prime member (free month with that Kindle Fire…free year with that Fire phone). Once you’ve done that, you start buying the higher margin physical items from Amazon (or third parties fulfilled through Amazon) and the big A can start making a profit…without raising e-book prices all that much.

They haven’t been raising the e-book prices generally…except for the New York Times bestseller hardback equivalents, which have shot up an extraordinary amount this year, based on my Snapshots.

Let me ask this, though: do you still have p-books you got as a child? I do. I think a lot of people do…cherished (often “well-used”) parts of youth. That won’t quite be the same with digital kids’ books. 😉

What do you think? Have you always had an idea for a kids’ book…and now you think you might be able to do it? Is there anything that worries you about this? For example, could people with fringe or anti-social ideas use this to reach children? Publishers get to choose their own categories…would someone publish the Kama Sutra (maybe with teddy bears) through KDP Kids? If you could easily gift KU to a kid this holiday season, do you think you would do that? Do books like this pose any threat to the continuance of the non-Fire Kindles? Feel free to tell me and my readers what you think by commenting on this post.

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. Shop ’til you help!

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Like this:

When Amazon wanted to put pressure on the publisher Hachette during some recent negotiations, one thing they did was take away pre-orders from some books.

Pre-orders are important. One of the big things they do is drive a book up the bestseller list, even before it is released (it’s not uncommon that some of the bestsellers are on pre-release).

Broadly speaking, traditionally published authors have tended to side with Hachette during what I call the “Hachazon War”, and indies (independent authors) have tended to side with Amazon. That’s just a rule of thumb, though…your authors may vary. 😉

One ironic thing that some indies mentioned, though, is that they couldn’t do pre-orders for Kindle books when using Amazon’s Kindle Direct Publishing. Amazon punished Hachette by taking away something it hadn’t given to any of the KDP indies.

It’s pretty simple: you say that a new book will be published at a future date, and allow pre-orders (it can happen in any of the KDP markets except India, which doesn’t do pre-orders for some reason).

Pre-orders push a book up the bestseller list.

The publisher (which may be just the author) doesn’t get paid until the customer is charged (on release day), but does get reports about pre-orders before that.

This certainly helps level the playing field.

One concern I have: what happens if somebody announces a pre-order…and then doesn’t have the book ready?

Do they just get to announce a new date, or are the orders canceled and then they have to be placed again?

Part of the idea of this is that you could announce a book while you were writing it or while it was in the production phase following the writing.

They only let you have up to ten at a time, but I predict right now that you’ll see people doing those ten, and doing them into the future. If somebody produced a series, and you could pre-order them now with a book coming out every year (or six months or month), that might make many people more likely to buy it.

Hey, here’s an idea: somebody could do one where a chapter or short story came out every day for ten days. You could pre-order them all on the same day, and then it would be sort of like a serialized novel.

I’m not big on pre-orders myself, but many of you may use this.

Oh, I should mention: you can’t pre-order Kindle Unlimited “borrows”. I’ve mentioned that before, but I’m sure some people are getting caught by that. They intend to borrow the book, and pre-order it…and then get charged for it.

I should also mention that Amazon announced much bigger “pool pay” for publishers in the Kindle Owners’ Lending Library and Kindle Unlimited. That’s the money that people split for each borrow, and it made sense that they would raise it, since one has to assume that Kindle Unlimited has added a lot of borrows to the pool.

I wonder if Amazon was thinking that they needed to something good for authors right now, during the Hachazon War. I don’t think that would have been the sole impetus, but it might have accelerated a development schedule.

Amazon is, I believe, needing tradpubs (traditional publishers) less and less…and to do that, they need authors. Making publishing through Amazon more attractive helps get that content (and often exclusive content) that they need to thrive without the Big Five.

What do you think? Do you care about pre-orders? Do you deliberately check what is coming up in the future? Have you ever pre-ordered a book and not gotten it when promised? Feel free to tell me and my readers what you think by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Normally, when you buy any eligible item at AmazonSmile, your chosen non-profit gets half of one percent of the purchase price.

Spend $100, and they get fifty cents.

With this bonus, it’s the equivalent of you spending $1000!

Here are the details:

One donation per customer.

Limited time offer. You must complete a purchase at smile.amazon.com including one or more items eligible for an AmazonSmile donation between 12:00 a.m. (PT) March 24, 2014 and 11:59 p.m. (PT) March 31, 2014. In addition, this promotion will expire after aggregate donations have reached $1 million.

The $5 donation will be made through the AmazonSmile program at smile.amazon.com under the same terms and at the same time as other donations made through the program, and will be in addition to the 0.5% donation made on the purchase price of your eligible item(s).

Offer valid for customers located and with billing addresses in the United States.

Offer may not be combined with other offers.

Amazon reserves the right to modify or cancel the offer at any time.

Offer is non-transferable and may not be resold.

If any of the products related to this promotion are returned, the donation will not be made.

If you violate any of the Terms and Conditions, the promotion will be invalid.

Void where prohibited.

Note that they will stop when they hit $1,000,000…so you’d better get shopping! 🙂

I already bought something, so my chosen non-profit has benefited.

For more information on AmazonSmile (including how to get your qualified non-profit into the program), see:

I suggested that some indies might want to promote using your overcharges from tradpubs (traditional publishers) settlement money to buy indie books…so you aren’t giving the money right back to the people who took too much in the first place. 🙂

You can probably find something…they have gotten better at discovery on that page. They have top-rated, bestselling, new, and featured books, for one thing.

If you’d rather go with a well-known book, but still want to avoid the publishers that overcharged, you could get books published by Amazon. Amazon wasn’t (and wouldn’t have been) part of raising those prices.

Those are mystery and suspense and include the original James Bond books by Ian Fleming and the 87th Precinct books by Ed McBain.

Books traditionally published by Amazon like that are often relatively inexpensive, and typically have the special features from Amazon (text-to-speech, lending, and so on).

I can tell you: the publishers who agreed to settle after being charged with overcharging (basically) would not be happy if you spent that money with Amazon! 😉

The next holiday is the Fourth of July…April Fool!

My first retail job (I eventually managed a brick-and-mortar bookstore, among other things) was in a “joke shop” called The House of Humor.

I was really there as a make-up expert at Halloween. I did special effects type make-up in the theatre, so I could serve as an advisor to people (and a retail clerk).

Things would get crazy when I worked there at Halloween! We literally might have a line of 300 people waiting to get into the store.

They would come in ten at a time…and get five minutes to shop!

During that time, I would help them pick latex masks, costumes, and make-up…and we’d get them rung up and out right afterwards (they got five minutes, but they were in the store longer than that).

What fun that was!

One interesting thing that most people didn’t realize is that we had to order the “good” Halloween masks…in March. It takes a very long time for them to create the Don Post quality masks.

That’s why we’d always be out of something hot…

A few examples:

Darth Vader (almost nobody thought Star Wars was going to be a big success before it was released)

Miss Piggy

Coneheads

On the last one, it was actually possible to make something, if you were crafty enough, with liquid latex and a plastic football.

We were also happy that Howard the Duck (at AmazonSmile) could be sold as, you know, a duck. 😉 That one did look good on paper in March, having George Lucas, Lea Thompson (hot from back to the future), and Thomas Dolby involved (and based on a Marvel comic…although that wasn’t as big a selling point back then as it is now).

I also remember one “oh oh” for somebody. This poor businessperson came into the store, with an “only slightly” faded red clown nose (drawn on with greasepaint), red cheeks, and red lips. You see, the person had taken greasepaint and drawn directly on their skin…not a good idea with red, especially (red stains the most). That person had a big presentation to do…and all I could really suggest was cover-up at that point.

It’s an interesting collection, including things like we sold, but also clothing, books, and gift cards for comedy clubs.

What do you think? Are you doing anything special with the money you got from the settlement? One of my readers got almost $100 back…how did you do? Do you have a great makeup/mask/costume story? Are you part of an organization that’s been helped by AmazonSmile? Feel free to tell me and my readers what you think by commenting on this post.

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. Shop ’til you help!

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

That’s the amount that publishers using Amazon’s Kindle Direct Publishing who have elected to put their books in the Kindle Owners’ Lending Library (KOLL) got for each time an eligible Prime member borrowed one of their books.

That’s up from February from $2.01. That $2.18 is significant: it means that books which are priced at $2.99 and which are getting the highest 70% royalty rate were worth more to the publisher when borrowed than when purchased (which is about $2.08, depending on the size of the book…there is a delivery charge based on file size).

That’s interesting both philosophically and strategically. People do get less when they borrow a book (they don’t get to keep it), but the publisher is paid more for it.

That’s because the consumer isn’t paying the publisher…Amazon is. Having the KOLL is a great selling point for physical Kindles (you can’t borrow from it with just a reading app). More importantly, I think, is that it increases the value of Prime, which I think is a key part of Amazon’s retailing strategy.

However…

The pool was the same in February and March: $600,000.

If publishers got more per borrow, that means there were fewer borrows.

Yep: people borrowed fewer books from the KOLL in March…and there were two more days in March.

That intrigued me, so I wanted to run some numbers. I knew the number of available books had been going up, so I included that:

Month

Pool

Pool Pay

Borrows

Per Day

Count

BPT

Dec-11

$ 500,000

$ 1.70

294,118

12,788

Jan-12

$ 700,000

$ 1.60

437,500

14,113

69,850

6.26

Feb-12

$ 600,000

$ 2.01

298,507

10,293

95,020

3.14

Mar-12

$ 600,000

$ 2.18

275,229

8,878

117,652

2.34

As you can see, the number of borrows went down in March over February.

Let me explain those columns:

The month is the month. 🙂

The pool is the amount that was divided among the participating publishers.

The pool pay is how much those publishers got for each “borrow”.

The borrows are the number of times that books were borrowed from the KOLL. Note that those aren’t all different titles. It’s possible that The Hunger Games was borrowed a lot more often than Love Your Kindle Fire…in fact, I’d bet on it. 🙂

Per day is the number of borrows per day. I did adjust for the program not starting until December 8th.

The count is thenumber of books I recorded for the KOLL on the first of that month. I considered counting, say, March 1st as being the February number, but I decided not to do that.

BPT is the number of Borrows Per Title. I divided the number of borrows by the count.

The number of titles is growing…the number of borrows is not growing as quickly, and has even gone down.

This suggests to me that Amazon is succeeding in getting independent publishers to go into the KOLL, giving Amazon more exclusives…but the number of borrows are being concentrated in fewer books. Fewer people making more money…

I don’t think so. I don’t think the number of borrows impacts them all that much, if it looks good. 🙂 More exclusive titles looks good. More “no additional cost” titles looks good. The pay per borrow going up looks good.

That last one is like a lot of businesses: a few people may make a lot of money, and that attracts people who think that it can happen for them. I believe it used to be true that most union actors were under the poverty level…but some made a lot of money. Most professional baseball players (going down to the feeder leagues) don’t make much money…but some make tons.

The same has been true of authors…and maybe, it’s true of authors in the KOLL.

Borrows (eligible Prime members borrow them from the Kindle Owners’ Lending Library…KOLL…at no additional cost)

Giveaways (I offer them for free on promo days)

Certainly, those aren’t the only ways. The books could be gifted to someone, loaned to someone not on the account, or shared by people on the same account. I don’t have any way of tracking those, though. My guess is that those may account for a significant proportion of the people who read my books, but I can’t really track that or affect it much. I enable lending on my books…that’s about the only control I could have over it.

So, I’m curious about how the three methods I listed above compare.

People using Amazon’s KDP (Kindle Direct Publishing) like me aren’t really supposed to give you sales figures, but what I can do is giving you comparisons without a scale. In other words, the charts below are based on the real numbers but don’t tell you what those numbers are: 80, 40, and 20 would look the same as 800, 400, and 200.

First, let’s take a look overall. I’m using the figures for March 2012, through what’s been reported to me on March 18. As the month goes on, I’ll presumably have more sales and more borrows, but not more giveaways (I don’t anticipate doing another promo day this month):

Giveaway: 87%

Net Sold: 10%

Borrowed: 3%

As you can see, sold is about three times what the borrowed figure is. I was a bit surprised that more people didn’t get the books during the promo day on March 15th, but I had done a giveaway for most of these titles on February 12th as well.

It’s only been available since late November of 2011 (and I’ve updated it considerably since then), and while the sales have lost the initial bloom, it still sells relatively well.

I wanted to compare that to my “backlist” titles, which have been around for a while.

It’s important to note that it is also priced differently. LYKF is $2.99, and the other are $0.99. My guess is that having a lower price may hurt the number of borrows you have…in this hypothesis, people would prefer to borrow more expensive books, so that it seems like a better deal*.

Here’s the chart for LYKF:

Love Your Kindle Fire

Giveaway: 85%

Net Sold: 10%

Borrowed: 5%

As you can see, the percentage that were sold is the same…but a higher percentage borrowed, and a lower percentage took advantage of the giveaway (even though it was the first time this book had been given away).

2% difference in borrows might not seem like much, but it makes sales only twice the borrows (excluding the giveaways) as opposed to more than three times the borrows overall.

For the next comparison, let’s take my second best-selling title, and the best-selling of the backlist:

While people will get the book as a giveaway, they don’t want to borrow it.

What does all this tell us?

What publishers (and anyone who puts books out there to be bought is a publisher, even if it is just one person who is the author) will want to know is, which way makes the most money?

That’s a bit hard to tell, because we don’t know how much money we will get per borrow until the month is over and Amazon tells us. I think the per borrow figure is going to continue to drop, unless Amazon raises the pool amount which is split among all of the borrows.

Let’s say it’s…$1 for March.

For a $0.99 book, the royalty when it is purchased is about thirty-five cents (it’s below the minimum price range to get the higher 70% royalty). So, you’d have to sell about three times as many as are borrowed to make more money on sales. Hmm…that doesn’t tell us much on the overall for me.

For a $2.99 book that qualifies for the 70% range, you get about $2.08 per purchase (there is a delivery charge for books, based on their size…mathematically, 70% would be closer to $2.09, but let’s not quibble). 😉

So, selling roughly half as many would get you the same money as the borrows, again, based on a hypothetical one dollar per borrow.

The nice thing is that you don’t have to choose one or the other. 🙂

However, to be eligible for the borrows, you have to put your book exclusively in the Kindle store for ninety days…you can’t also sell it through Barnes & Noble, for example. That’s something some publishers need to really consider. I only sell through Amazon, so that doesn’t have an impact on me.

What about the massively higher giveaway figures? Am I losing all that money?

Nah.

Many of the people who get a free book would never buy it. I think that’s particularly true on the Collected ILMK. People will get it for free…but many of them wouldn’t buy it, so I haven’t lost anything.

Do those giveaways help the sales?

I don’t have enough data yet…but I’ll say, I thought they might result in more reviews, and that hasn’t happened much. I have to face the fact that I’m just not a review magnet. 😉

Regardless, I thought you’d find these figures interesting. It’s a rapidly changing landscape out there, and more data will help people navigate it. After all, just drawing a menacing picture on the map and saying, “Here there be digital” doesn’t help much. 😉

* It occurred to me that I could test this a bit by looking at the most popular books in the KOLL (Kindle Owners’ Lending Library). One thing that complicates that is that many of the books in the KOLL are free, probably due to the promo days that KDP Select participants can do. Looking at the ones that aren’t free, 20 of the top 100 books in the KOLL are $0.99. 48 of them cost more than that…that’s about 29% that are $0.99. Looking at the 100 most popular paid books over all in the Kindle store, 23 of them were ninety-nine cents…which tends to refute that idea.

Amazon has just improved the experience for Kindle Direct Publishers by giving us more information on what happens when we take advantage of their KDP Select program and offer our books for free through the Kindle store.

I did that with most of my books on my birthday on February 12th…and I knew that many of them were downloaded.

However, it was hard to tell exactly how many.

The free downloads were mixed in with the purchases…I couldn’t tell which was which.

I wrote Amazon and asked if I was just missing that somehow. It didn’t seem likely: I’m pretty good at finding stuff. 😉

I’d gotten this response from them on February 24 (less than a week ago):

“At this time, free sales are not shown separately on the sales reports, however, we’re making improvements to our reports to help give the clearest picture of your sales.”

Well, one of my readers, Donna White Glaser, pointed out to me that (as of March 1), they are now giving us more data!

When they say they are making improvements, they mean it. 😉

They’ve added two columns:

Free Units-Promo**

Free Units-Price Match***

That second one happens when a title “… is made available for free due to matching a competitor’s free promotion”

Yep…if your book is free at another retailer, Amazon may price match it and give it away…and, by the way, you don’t get royalties when that happens. You also don’t get royalties when you choose to give away books on promo days.

Still, you need that data to determine if freebies are worth it…and Amazon is now giving it to us.

I do wish we could see the data for months before March 2012, but maybe in the future.

November 3, 2011: Amazon adds a new benefit for eligible Prime members who own physical Kindles. They can borrow up to a book a month from a select set of books…the library starts with about 5,000 titles.

December 8, 2011: Amazon introduces KDP Select, a program through which publishers using their Kindle Direct Publishing can add their books to the KOLL (Kindle Owners’ Lending Library). They will be compensated by dividing a pool each month, based on the number of “borrows” they have.

I do think, as it’s gone forward, the KOLL may have been good for my sluggish backlist. I’ll have to wait to see if it has apparently boosted sales of them as well, or if the money is going to come mostly from borrows.

I have no doubt that this is good for readers. One of the KDP Select elements is the ability to offer you books for free for five days out of the 90…I’ve done it, and I’m sure readers benefited from that.

Well, let me amend that…it’s good for eligible Prime members.

NOOK users couldn’t get those books for free or otherwise during their enrollment in KDP Select (although they could get the books using a Kindle or a Kindle app…there are people who have both).

I think it’s a brilliant strategy on Amazon’s part. Prime is, I think, where the money is. If content is what drives hardware purchases, this is huge for Amazon.

If this teaches people to buy independently published books, look out traditional publishers!

I always like to consider the risks…

There could be backlash against Amazon for the exclusive part of the contract

Publishers may resent the small amount of money per borrow if the quantity keeps increasing without the pool increasing

Publishers might put less than optimal product in the KOLL, leading to dissatisfaction on the part of borrowers

Readers may find that the books being made free under the program are good enough to read…so they buy fewer books

Amazon could raise the cost of Prime, since the demand may increase…and they may have to significantly raise the pool pay

Those are a few possibilities I see…but overall, I think this is an example of Amazon successfully innovating.

What do you think? Feel free to comment on this post to let me and my readers know.

*Note: you can see the books that are available for eligible Prime members to borrow from this list on your computer, but you must borrow them from you Kindle device by clicking a button that says “borrow” not “buy” to have the cost covered by your annual Prime fee.

Like this:

Amazon has reported the results of the KDP (Kindle Direct Publishing) Select (KDPS) program for January 2012.

That’s a way that publishers who use KDPS can be compensated when eligible Prime members borrow their books from the Kindle Owners’ Lending Library (KOLL).

Let me explain that a little more before I get into the figures.

Eligible Prime members typically pay $79 a year for two-day shipping on many items at no additional cost. Another significant group who are eligible Prime members are Kindle Fire owners in their first month (when they get a free month of Prime).

One of the added benefits of Prime is the ability to borrow up to one book a calendar month from a special set of books called the Kindle Owners’ Lending Library (KOLL).

Independent publishers (often just the author of the book) can get their books into the Kindle store by using Kindle Direct Publishing (KDP), which was formerly called the Digital Text Platform (DTP).

Why would an author, though, want their books to be given away when they could be sold?

Obviously, one reason is to promote sales through what I call “word of mouse” (tweets, reviews, blog posts, and so on).

However, that may not be enough of a motivation. Amazon needs the KOLL to be attractive to get people interested in Prime so those customers buy physical goods (what I call “diapers to windshield wipers”), where the profit is.

When the KOLL started it had about 5,000 titles.

It now has 111,598…that’s the jump just since November 3, 2011 (not even four months).

It was quite exciting when Amazon announced that they were increasing the pool for January from $500,000 to $700,000. I’m sure publishers figured they would make more money in January.

Well, with the same number of borrows it would have been more money, of course.

Instead, the number of borrows went up so much, that KDP Select participants are getting less per borrow $1.60 approximately, instead of $1.70.

I think it’s also pretty likely that there are a lot more publishers in the pool. Even though some publishers probably added titles (I added my Love Your Kindle Fire: The ILMK Guide to Amazon’s Entertablet to it in February), I would guess that it was spread a lot more thinly. Oh, some publishers probably made more, but others probably made less.

There were 437,000 borrows in January.

Does that mean that the trend will continue and there will be close to 650,000 borrows in February?

If it did, publishers would make a lot less per borrow: the pool for February has gone down to $600,000 from the $700,000 in January…that would drop it down to about ninety-three cents per borrow.

However, as Amazon noted in the announcement to KDP publishers, January was likely an especially good month. January is a good sales month: there are returns, for one thing, and people who held off buying something for themselves until they saw what other people got them. 🙂 The Kindle Fire owners are part of the KOLL…and that may have bumped up more in December than it did in January.

February is also two days shorter than January this year. 🙂

My guess, though, is that KOLL borrows are front-loaded in a month…that a lot more of them happen in the beginning of the month than in the middle or at the end.

That just makes sense to me, since the limitation is up to one book per calendar month. If you borrow a book in January, you can’t borrow another one until February. So, there is pent-up borrowing demand until the next calendar month starts.

Even given that, I think it is possible that there will be fewer borrows in January than in February…but about fifteen percent fewer? That’s what it would have to be for $600,000 to pay as much as $700,000.

Let’s say that publishers make less for KOLL borrows in February than in January (as they did in January compared to December). Does that mean that publishers should stay out of the KOLL?

We still don’t have enough data. If the KOLL borrows increase paid sales, it could be worth it. If the KOLL borrows represent additional income, rather than replacing sales, that could make it worth it.

We do have to balance the ninety-day exclusivity period…if publishers are making sales through Barnes & Noble, Smashwords, or their own websites (not through Amazon), the KOLL is less attractive.

I’m staying in it, but I’m keeping an eye on it, too. 🙂

One last fascinating question for me on this…was Amazon deliberately manipulating the pool amount to try to get the per borrow pay to be about $1.50? They are presumably really good at estimating demand (although they’ve underestimated it on Kindles in the past). The example that Amazon uses to show the math uses 100,000 borrows with a $500,000 pool…or $5 per borrow. That may, perhaps, suggest to people an overly optimistic outcome.

Living on Lending, Banking on Borrows

I noticed something interesting the other day, and it is related to this discussion.

I managed a game store (in addition to having managed a bookstore), and I do like to play around with (but still within) the rules.

When it was time for me to borrow a book from the KOLL, I sorted them by most expensive. 🙂 I figure I want to get my $79 a year out of our Prime membership. Yes, the Prime streaming videos are a great plus. Yes, we’re having fun with the Prime shipping (but I’m not convinced that actually saves us any money…it didn’t in the previous analyses I did). If I can borrow books that cost more than the annual Prime fee divided by twelve (about $6.58), I’m making a profit. 🙂

Of course, I may also be getting books I wouldn’t have gotten otherwise.

However, here’s what I noticed…over forty Kindle store books priced at $200!

That doesn’t seem to be the case here, though. There are a bunch of books by the same person, but there are a number of books. Some of them are smaller than a regular novel (based on file size), and some appear to be fiction. Here, for instance, is a book that costs $200…and is a tiny 41KB.

Who would pay $200 for it?

Well, the thing here is that nobody has to pay that…and the publisher can still make money.

How?

If people borrow it in the KOLL.

Why would people borrow this?

Curiosity, maybe…and maybe they found it by sorting the prices high to low like I did.

Does that strategy work?

Dunno. 😉

It’s like when people are saying that some odd collectible is going for a thousand dollars. I often say, “No, it’s being offered for a thousand dollars.” That doesn’t mean it has ever sold for that…and I don’t know if anybody has borrowed one of these $200 books.

Oh, and why is it $200 and not, say, a gazillion dollars? Kindle Direct Publishing books have to be priced from ninety-nine cents to $200. Some people want to know how to tell if a book is published through the KDP…if it’s priced over $200, it isn’t. 😉

What do you think? If you are a publisher, are you staying with the KOLL? Is Amazon trying to keep the borrow pay down around a buck and a half? Is anybody going to borrow This Book Shows Everyone Just How Rich You Really Are by Mon. E. Bags, priced at $200? Feel free to let me know by commenting on this post.

* Note: while you can see the books you can borrow as an eligible Prime member at the link I have provided, you can only borrow one from you physical Kindle . If you are reading this blog on your computer, you will not see a “borrow” button on the product pages for the books. If you want to borrow a book for free (technically, for no additional cost), you must click a button that says “borrow”, not “buy”.

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